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Gambling.com Group Limited Reports Third Quarter 2021 Financial Results
Gambling.com Group Limited, a leading provider of digital marketing services active exclusively in the global online gambling industry, today announced its operating and financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Financial Highlights
- Revenue of $10.1 million grew 37% compared to $7.4 million in the same period for the prior year
- Net income of $4.7 million, or $0.13 per diluted share, compared to a net income of $2.3 million, or $0.08 per diluted share, in the same period for the prior year
- Adjusted EBITDA of $3.5 million decreased 14% compared to $4.0 million in the same period for the prior year, representing an Adjusted EBITDA margin of 34%1
- Free cash flow of $0.8 million decreased 81% compared to $3.9 million in the same period for the prior year2
Third Quarter 2021 Business Highlights
- Completed successful public listing of common shares on the Nasdaq Global Market under the ticker symbol “GAMB”
- Announced appointment of Mr. Daniel D’Arrigo to Board of Directors
- Received temporary supplier license from the Arizona Department of Gaming to provide marketing services to licensed operators in the state and launched free-to-use comparison of legal online sports betting services on BetArizona.com
- Launches of Marylandbets.com, casinosource.nl and gambling.com/nl providing bettors in Maryland and the Netherlands with trusted and up to date gambling information to help them place safe and secure legal wagers
- Completed acquisition of domains suitable for targeting the US market
“Our financial performance in the third quarter remained strong as we grew revenue by 37% compared to the prior year and, despite the third quarter being the seasonally slowest quarter of the year, delivered an Adjusted EBITDA margin of 34%,” said Charles Gillespie, Chief Executive Officer and co-founder of Gambling.com Group. “Importantly, after the quiet summer months of July and August, we delivered all-time-high revenue in September. With the launch of Arizona and the kickoff of the NFL season, we saw a significant uplift in U.S. revenue in September and our U.S. performance exceeded our internal expectations. Entering the quarter with good momentum we are encouraged by the start to our seasonally stronger fourth quarter. We remain highly focused on prudently growing the Company through both sustained organic growth and future accretive acquisitions which we continue to actively pursue”
1Â Adjusted figures represent non-IFRS information. See “Non-IFRS Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable IFRS numbers.
2Â Adjusted figures represent non-IFRS information. See “Non-IFRS Financial Measures” and the tables at the end of this
release for an explanation of the adjustments and reconciliations to the comparable IFRS numbers.
Third Quarter 2021 vs. Third Quarter 2020 Financial Highlights
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THREE MONTHS ENDED |
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|
CHANGE |
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||||||||||
|
|
|
2021 |
|
|
2020 |
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|
$ |
|
|
% |
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||||
|
|
|
(in thousands USD, except for |
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|||||||
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CONSOLIDATED STATEMENTS OF |
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|||||||||||||||
|
Revenue |
|
$ |
10,123 |
|
|
$ |
7,406 |
|
|
$ |
2,717 |
|
|
|
37 |
% |
|
Operating expenses |
|
|
(7,722 |
) |
|
$ |
(3,931 |
) |
|
$ |
(3,791 |
) |
|
|
96 |
% |
|
Operating profit |
|
|
2,401 |
|
|
|
3,475 |
|
|
|
(1,074 |
) |
|
|
(31 |
)% |
|
Income before tax |
|
|
2,694 |
|
|
|
2,609 |
|
|
|
85 |
|
|
|
3 |
% |
|
Net income for the period attributable to the |
|
$ |
4,675 |
|
|
$ |
2,303 |
|
|
$ |
2,372 |
|
|
|
103 |
% |
|
Net income per share attributable to ordinary |
|
|
0.14 |
|
|
|
0.08 |
|
|
|
0.06 |
|
|
|
75 |
% |
|
Net income per share attributable to ordinary |
|
|
0.13 |
|
|
|
0.08 |
|
|
|
0.05 |
|
|
|
63 |
% |
n/m = not meaningful
|
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THREE MONTHS ENDED |
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CHANGE |
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||||||||||
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2021 |
|
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2020 |
|
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$ |
|
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% |
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||||
|
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(in thousands USD, unaudited) |
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NON-IFRS FINANCIAL MEASURES |
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||||
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Adjusted EBITDA |
|
$ |
3,464 |
|
|
$ |
4,027 |
|
|
$ |
(563 |
) |
|
|
(14 |
)% |
|
Adjusted EBITDA Margin |
|
|
34 |
% |
|
|
54 |
% |
|
n/m |
|
|
n/m |
|
||
|
Free Cash Flow |
|
|
754 |
|
|
|
3,917 |
|
|
|
(3,163 |
) |
|
|
(81 |
)% |
n/m = not meaningful
|
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THREE MONTHS ENDED |
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CHANGE |
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||||||||||
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2021 |
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2020 |
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|
Amount |
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% |
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||||
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(in thousands, unaudited) |
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OTHER SUPPLEMENTAL DATA |
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||||
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New Depositing Customers (1) |
|
|
27 |
|
|
|
28 |
|
|
|
(1 |
) |
|
|
(4 |
)% |
(1)Â Â Â Â Â Â We define New Depositing Customers, or NDCs, as unique referral of a player from our system to one of our customers that satisfied an agreed metric (typically making a deposit above a minimum threshold) with the customer, thereby triggering the right to a commission for us.
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AS OF |
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AS OF |
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CHANGE |
||
|
|
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2021 |
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2020 |
|
$ |
|
% |
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|
|
(Unaudited) |
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|
|
|
|
|
|
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|
(in thousands, USD) |
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||
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CONSOLIDATED STATEMENTS OF FINANCIAL |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$53,160 |
|
$8,225 |
|
$44,935 |
|
n/m |
|
Working capital (2) |
|
55,064 |
|
10,059 |
|
45,005 |
|
n/m |
|
Total assets |
|
91,648 |
|
45,383 |
|
46,265 |
|
n/m |
|
Total borrowings |
|
5,919 |
|
5,960 |
|
(41) |
|
n/m |
|
Total liabilities |
|
11,373 |
|
11,171 |
|
202 |
|
n/m |
|
Total equity |
|
80,275 |
|
34,212 |
|
46,063 |
|
n/m |
(2)Â Â Â Â Â Â Working capital is defined as total current assets minus total current liabilities.
n/m = not meaningful
Revenue
Total revenue in the third quarter increased 37% to $10.1 million compared to $7.4 million in the comparable period for the prior year. On a constant currency basis, revenue increased $2.3 million, or 30%. The increase was driven by improved monetization of NDCs that we attribute to a combination of technology improvements and changes in product and market mix. NDCs decreased 4% to 27,000 compared to 28,000 in the prior year.
Our revenue disaggregated by market is as follows:
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THREE MONTHS ENDED |
|
|
CHANGE |
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||||||||||
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|
|
2021 |
|
|
2020 |
|
|
$ |
|
|
% |
|
||||
|
|
|
(in thousands USD, unaudited) |
|
|
|
|
|
|
|
|||||||
|
U.K. and Ireland |
|
$ |
4,483 |
|
|
$ |
4,311 |
|
|
$ |
172 |
|
|
|
4 |
% |
|
Other Europe |
|
|
2,718 |
|
|
|
1,162 |
|
|
|
1,556 |
|
|
|
134 |
% |
|
North America |
|
|
2,270 |
|
|
|
1,081 |
|
|
|
1,189 |
|
|
|
110 |
% |
|
Rest of the world |
|
|
652 |
|
|
|
852 |
|
|
|
(200 |
) |
|
|
(23 |
)% |
|
Total revenues |
|
$ |
10,123 |
|
|
$ |
7,406 |
|
|
$ |
2,717 |
|
|
|
37 |
% |
Revenue increases were primarily driven by organic growth in our Other Europe and North American markets.
Our revenue disaggregated by monetization is as follows:
|
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|
THREE MONTHS ENDED |
|
|
CHANGE |
|
||||||||||
|
|
|
2021 |
|
|
2020 |
|
|
$ |
|
|
% |
|
||||
|
|
|
(in thousands USD, unaudited) |
|
|
|
|
|
|
|
|||||||
|
Hybrid commission |
|
$ |
2,808 |
|
|
$ |
3,847 |
|
|
$ |
(1,039 |
) |
|
|
(27 |
)% |
|
Revenue share commission |
|
|
829 |
|
|
|
794 |
|
|
|
35 |
|
|
|
4 |
% |
|
CPA commission |
|
|
5,455 |
|
|
|
2,535 |
|
|
|
2,920 |
|
|
|
115 |
% |
|
Other revenue |
|
|
1,031 |
|
|
|
230 |
|
|
|
801 |
|
|
|
348 |
% |
|
Total revenues |
|
$ |
10,123 |
|
|
$ |
7,406 |
|
|
$ |
2,717 |
|
|
|
37 |
% |
Revenue increases were driven primarily by additional CPA commission and Other revenue. The increase in Other revenue was driven primarily by bonuses related to achieving certain operator NDC performance targets.
Our revenue disaggregated by product type from which it is derived is as follows:
|
|
|
THREE MONTHS ENDED |
|
|
CHANGE |
|
||||||||||
|
|
|
2021 |
|
|
2020 |
|
|
$ |
|
|
% |
|
||||
|
|
|
(in thousands USD, unaudited) |
|
|
|
|
|
|
|
|||||||
|
Casino |
|
$ |
7,965 |
|
|
$ |
6,354 |
|
|
$ |
1,611 |
|
|
|
25 |
% |
|
Sports |
|
|
2,076 |
|
|
|
858 |
|
|
|
1,218 |
|
|
|
142 |
% |
|
Other |
|
|
82 |
|
|
|
194 |
|
|
|
(112 |
) |
|
|
(58 |
)% |
|
Total revenues |
|
$ |
10,123 |
|
|
$ |
7,406 |
|
|
$ |
2,717 |
|
|
|
37 |
% |
Revenue increases were driven by growth in revenue from casino and sports products.
Operating Expenses
|
|
|
THREE MONTHS ENDED |
|
|
CHANGE |
|
||||||||||
|
|
|
2021 |
|
|
2020 |
|
|
$ |
|
|
% |
|
||||
|
|
|
(in thousands USD, unaudited) |
|
|
|
|
|
|
|
|||||||
|
Sales and marketing expenses |
|
$ |
3,587 |
|
|
$ |
1,790 |
|
|
$ |
1,797 |
|
|
|
100 |
% |
|
Technology expenses |
|
|
1,123 |
|
|
|
663 |
|
|
|
460 |
|
|
|
69 |
% |
|
General and administrative expenses |
|
|
2,978 |
|
|
|
1,402 |
|
|
|
1,576 |
|
|
|
112 |
% |
|
Allowance for credit losses and write offs |
|
|
34 |
|
|
|
76 |
|
|
|
(42 |
) |
|
|
(55 |
)% |
|
Total operating expenses |
|
$ |
7,722 |
|
|
$ |
3,931 |
|
|
$ |
3,791 |
|
|
|
96 |
% |
n/m = not meaningful
Total operating expenses increased by $3.8 million to $7.7 million compared to $3.9 million in the prior year. On a constant currency basis, operating expenses increased by $3.5 million to $7.7 million compared to $4.2 million in the prior year. The increase was driven primarily by headcount across Sales and Marketing, Technology, and General and Administrative functions as we invest in the Company’s organic growth initiatives as well as increased administrative expenses associated with operating as a public company.
Sales and Marketing expenses totaled $3.6 million compared to $1.8 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount and professional services.
Technology expenses totaled $1.1 million compared to $0.7 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount partially offset by capitalized development costs.
General and Administrative expenses totaled $3.0 million compared to $1.4 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount, professional services, and insurance expenses.
Earnings
Adjusted EBITDA decreased by 14% to $3.5 million compared to $4.0 million in the prior year representing an Adjusted EBITDA margin of 34%. The decrease was driven primarily by increased operating expenses partly offset by increased revenue.
Operating profit in the third quarter decreased 31% to $2.4 million compared to $3.5 million in 2020. The decrease was driven primarily by a decrease in Adjusted EBITDA and an increase in share-based payments expense.
Net income in the third quarter totaled $4.7 million, or $0.13 per diluted share, compared to net income of $2.3 million, or $0.08 per diluted share, in the prior year. The increase was primarily driven by the recognition of deferred tax assets related to the transferred intangible assets.
Free Cash-flow
Total cash generated from operations of $1.4 million decreased 65% compared to $4.0 million in the prior year. The decrease was driven primarily by decreased adjusted EBITDA, the settlement of non-recurring IPO-related expenses and income tax payments. Free cash flow totaled $0.8 million compared to $3.9 million in the prior year. The decline was the result of decreased cash flow generated from operations and increased capital expenditures consisting primarily of the acquisition of domain names and capitalized development costs.
Balance Sheet
Cash balances as of September 30, 2021 totaled $53.2 million, an increase of $45.0 million compared to $8.2 million as of December 31, 2020. Working capital as of September 30, 2021 totaled $55.1 million, an increase of $45.0 million compared to $10.1 million as of December 31, 2020.
Total assets as of September 30, 2021 were $91.6 million compared to $45.4 million as of December 30, 2020. Total borrowings, including accrued interest, totaled $5.9 million compared to $6.0 million as of December 31, 2020. Total liabilities were $11.4 million compared to $11.2 million as of December 31, 2020.
Total equity as of September 30, 2021 was $80.3 million compared to $34.2 million as of December 31, 2020.
The increases in working capital, total assets, and total equity were driven primarily by the net proceeds received from the IPO and operating profit and net income generated by the Company.
2021 â 2023 Financial Targets
|
|
|
|
|
Total Revenue Growth |
|
> Average 40% |
|
Adjusted EBITDA Margin3 |
|
> Average 40% |
|
Leverage4 |
|
< Net Debt to Adjusted EBITDA 2.5x5 |
2021 Outlook
Elias Mark, Chief Financial Officer of Gambling.com Group, added, “Our third quarter results came in a bit above our expectations and after slow summer trading our financial performance accelerated in September to close out the quarter with the best month in the Company’s history. Our Adjusted EBITDA margin of 34% in the quarter was healthy despite a seasonally slow quarter and investments in scaling the organization for organic growth initiatives and operating as a public company. This is consistent with our prior guidance that our near-term margins may deviate from our average 40% target as we invest in our organic growth plan and pursue our M&A strategy. For the full year, we are reiterating our expectation to achieve both above 40% year-on-year organic revenue growth and approximately 40% Adjusted EBITDA margin. We remain in a very strong financial position after the IPO last quarter which offers us significant optionality going forward to execute our growth plan and each of our capital allocation priorities.”
Conference Call Details
|
|
|
|
|
Date/Time: |
|
Thursday, November 18, 2021, at 9:00 am EST |
|
Webcast: |
|
https://www.webcast-eqs.com/gamb20211118/en |
|
U.S. Toll-Free Dial In: |
|
877-407-0890 |
|
International Dial In: |
|
+1-201-389-0918 |
To access the call, please dial in approximately ten minutes before the start of the call. An accompanying slide presentation will be available in PDF format within the “News & Events” section of the Company’s website.
The Tennessee Sports Wagering Council through its executive director issued $50,000 in fines to Bovada.lv, an unlicensed and therefore illegal sportsbook operating in Tennessee.
Bovada failed to comply with cease and desist letters delivered to addresses in Curaçao, and Council investigators placed wagers through Bovadaâs platform on three separate occasions, including as recently as October 16, 2024.
The Sports Gaming Act authorizes the Council to impose a $10,000 fine for the first offense of accepting wagers without a license, which rises to $15,000 for the second offense, and $25,000 for the third offense. Subsequent offenses may lead to the imposition of a $25,000 fine for each occurrence, an occurrence being a single wager accepted in Tennessee.
In the cease and desist letters, the Council ordered Bovada to allow all Tennessee users to withdraw any funds currently held by the unlicensed sportsbook.
âThe Sports Wagering Council recommends that Tennessee users of Bovada withdraw their funds immediately. Our primary role is the protection of the public interest through a safe, regulated environment, and Tennessee sports bettors need to know that just because they can access a sports betting website or app inside Tennesseeâs borders does not mean it is licensed to do business here,â Mary Beth Thomas, Executive Director of Tennessee Sports Wagering Council, said.
Legal sportsbook operators provide important bettor protections not found in the illegal market. If an individual wagers with unlicensed sportsbooks, their sensitive financial and personal information may not be protected and could even be shared with criminal enterprises. The bettorâs money could be withheld or disappear without a way to recover it.
The SWC is working closely with its network of law enforcement at the state and federal level to eradicate illegal sportsbooks such as Bovada and others.
Tennessee is the largest âonline-onlyâ sports betting market in the US, with more than $4.7 billion wagered in Tennessee last fiscal year through online sportsbooks licensed by the Council.
The hottest new game from Aristocrat Gaming, Phoenix Link, is now live on casino floors, with Yaamavaâ Resort & Casino being the first in North America to offer the highly-anticipated game. As the next evolution of the international hit game, Dragon Link, Phoenix Link features player-favorite mechanics from top games with all-new themes, features, and bonuses.
âWe have been humbled by the incredible global fanfare Dragon Link has received over the years but are never ones to rest on our laurels. The teams have been working tirelessly on a follow-up that brings together all the player-favorite elements in a new and exciting way with Phoenix Link as the proud result. We were thrilled to partner with Yaamavaâ to premiere Phoenix Link with flair, excitement, and celebration,â said Victor Duarte, executive vice president of product for Aristocrat Gaming.
Phoenix Link players will enjoy the gameâs additional denominations, configurations, and jackpots on each of the launch game theme titles. Gameplay features include Hold & Spin, Free Games with multiplier wilds or twin spin reels, Phoenix Mystery trigger, and more new bonus twists. Phoenix Link is available on the Neptune Single cabinet.
âYaamavaâ is thrilled to host yet another world premiere in gaming with the launch of Phoenix Link by Aristocrat Gaming. Our Club Serrano members are already raving about this captivating extension of the player-favorite Dragon Link. Itâs a great addition to the Yaamavaâ gaming floor,â said Kenji Hall, General Manager of Yaamavaâ Resort & Casino at San Manuel, said.
On November 6, the iGaming industry in Mexico is preparing for a key event in which the benefits and challenges that regulation has brought to the Mexican market will be discussed. Under the title “Benefits of Regulation in the Mexican Market”, this panel will offer an in-depth look at the impact of regulation on transparency, competition and consumer protection, critical issues in the new digital era of iGaming.
The event, moderated by Geraldine Alexandra GarcĂa Torres, Media Manager of Digital Gaming News, will feature the participation of recognized figures in the sector such as Daniel Magariños, representative of BMM Testlabs, and Hermilo Peregrina Cabrera of Prometeo IT Solutions. Both panelists will contribute their extensive knowledge and experience in regulation and certification in the Mexican market, and will analyze with the public the challenges and opportunities that companies face in an increasingly competitive and regulated context.
BMM Testlabs, who will participate as a Gold Sponsor, underlines with its sponsorship the importance of regulation to strengthen the iGaming sector in Mexico and demonstrates its commitment to progress and transparency in the Mexican market. For its part, Kushki joins as a Silver Sponsor, promoting the dialogue and analysis necessary for the industry.
Daniel Magariños, from BMM Testlabs, expressed his enthusiasm for participating in this digital webinar: âIt has been a pleasure to be able to share our comments as a Laboratory on a market like the Mexican one and exchange opinions with a reference like Hermilo and the company Prometeo IT Solutions, with its excellent track record in this market. A relaxed talk with a lot of learning that I hope will be interesting for the attendees.â
For his part, Hermilo Peregrina, from Prometeo IT Solutions, highlighted the relevance of these spaces for dialogue: âThank you to Conferencias iGaming for the invitation to participate in this panel. Thanks to Geraldine for coordinating us, and it was a pleasure to share ideas and opinions with my friend Daniel from BMM Testlabs, who has extensive experience in international regulations and certifications.â
Sponsor Support
The panel has the support of important sponsors who recognize the relevance of regulation in the development of the iGaming market in Mexico. Among them, BMM Testlabs as Gold Sponsor, and Kushki as Silver Sponsor.
Event Details:
Date: November 6
Time: 10:00 a.m. (Mexico)
Registration: Register here
Don’t miss the opportunity to be part of this essential conversation for the future of the industry. Secure your place and access a key analysis on the dynamic iGaming market in Mexico!
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